2024-04-26 19:00:36
Economic news Hebdo: Climate insurance is one of the main topics at the Casablanca meeting this year. MAMDA is a key player in this sector. What can you tell us regarding the Moroccan experience?
Mahmoud Oudghariri: Morocco started relatively early. Already in 1994, it established the first program linked to the drought risk for grain, in the form of a state guarantee. And then there was a very important step in terms of agricultural insurance in Morocco, in 2011, when this program was converted into an insurance contract. Where we went from a simple drought guarantee to a multi-risk climate insurance covering six climate hazards, and from a state guarantee to a formal insurance contract within the framework of a public-public-private collaboration between the Ministry of Agriculture Finance and MAMDA This multi-risk climate is intended for large crops, that is cereals, oilseeds and pulses.
FNH: How does this multi-risk climate system work?
MO: It is a guarantee that is based on loss of returns. We have to imagine that every plot of land is part of a rural municipality, and that every rural municipality is part of an agricultural zone. Morocco is divided, according to historical yields, into 3 agricultural zones: the favorable zone, the moderately favorable zone and the unfavorable zone. Compensation occurs when the yield observed at the level of a given municipality is lower than the reference yield of said municipality.
FNH: We are talking regarding a success story when we talk regarding climate multi-risk in Morocco. What are the factors for this success?
MO: I would perhaps mention three factors. I think the first is the model chosen by Morocco. And when we benchmark internationally, I believe that the Moroccan model contains all the good codes and all the good practices that we find in the Spanish, Canadian model, etc. it is important to highlight the choice of model and its relevance, which is a key factor for me. As another factor, we can cite the state’s proactive policy, through the Ministry of Agriculture, to absolutely want to develop the resilience of farmers. The state is there, it is involved in the whole process: at the economic level, but not only that, since it intervenes in the definition of the product, the price, the expertise… The state also shows a certain flexibility in the development of the product. Since 2011 we are on the fifth version of the product. This flexibility is very important for this type of program.
Last factor, and here, I will preach to my congregation!, is the operator and all the work done by MAMDA, which relies on the expertise and experience of more than 60 years brought to bear in this major public-private partnership project. As for the numbers of this success, since the transformation of the program into an insurance contract in 2011, we have observed a spectacular jump in the insured areas, going from an average of around 68,000 hectares before 2011 to 1.2 million hectares insured at the end of 2023. Moreover, during the last eleven years, no less than 4.5 billion dirhams in compensation have been paid out, with an acceleration in recent years, since the total compensation for the last 5 years is more than 3 billion dirhams. Success can also be measured by the quality of the service. Because, beyond the numbers, I believe that the operator has put in place all the human, financial, technical and technological means to upgrade the quality of the service. Particular emphasis has been placed on innovation and digitalisation. Thus, in a few years, MAMDA has become one of the first consumers of satellite images in Morocco, but also of agricultural indices and parameters such as NDVI (vegetation index) or geographic information systems, or even drones. All this to better predict, better evaluate and better serve the customer.
FNH: Covers the farmer’s costs thanks to this ?
MO: The results are largely in favor of the farmer, because on average over the period he paid 32 dirhams per hectare per year, and he received an average of 420 dirhams per hectare per year during the same period.
FNH: Are there comparable systems in Africa?
MO: I believe that the Moroccan experience is by far the most successful in Africa. On the other hand, Spain, which shared its experience during the Casablanca insurance meetings, is certainly the most successful experience in Europe.
FNH: The Casablanca meetings were regarding the possibility of insuring (or not) climate risks in the face of the diversity of demands. What is the situation in Morocco, and what do you think are the solutions to guarantee sustainable risk?
MO: In fact, there has been a worsening of the risk observed over the past 6 years, and future prospects unfortunately confirm this worsening. This is a global phenomenon, which also makes the international reinsurance market for this type of risk increasingly tense! Faced with this situation, there are two types of paths we can consider: how to limit the risk and how to reduce it? I believe that one of the most serious ways to limit the loss experience of climate multi-risk consists in improving the volatility of the grain crops in Morocco. We are currently recording very low performance levels that might be improved: thankfully! There are several government and private initiatives working towards this goal, covering the entire grain production cycle:
1. Development and use of quality seeds that are resistant to climate change, with very significant yield gains (between 20 and 40% depending on the crops. At this point we have everything we need in terms of research and development, especially thanks to our research institutes such as INRA…) and in terms of financial incentives.
2. The transition from traditional sowing to direct sowing, with yield gains of around 30%. Several initiatives have been launched in this direction, in particular the 1 million hectare initiative of the Ministry of Agriculture, or the “carbon farming” initiative which can also be mentioned as an opportunity to be seized by farmers to reduce the carbon impact of their crops, receive remuneration in return, at the same time as they increase returns.
3. Improving the monitoring of production stages through good technical advice and the use of technology (weather prediction, data analysis, connected agriculture, etc.) to optimize phytosanitary treatments, fertilizers, etc. The other equally important way is How to accumulate or reduce the drought risk for cereals with other climatic hazards such as frost and hail for tree cultivation. And there I think that the Spanish case is very constructive. In Spain, the coverage rate for banana trees with multi-risk climate insurance is 100%!, that for apple trees is 83%!…
FNH: The solutions to improve the crop are known and initiatives related to the solutions have been launched. So what are the obstacles preventing this productivity from being achieved quickly?
MO: The biggest limitation in my opinion is the fragmentation of land. We have very small plots, so very small farmers. It is difficult to modernize the production process at the scale of each farmer who has a plot of 1 or 2 hectares. That said, there are solutions. Morocco has even passed a law on agricultural aggregation, but is still struggling to get off the ground for cereals, knowing that in other crops, especially sugar crops, we have succeeded with one of the continent’s best models in terms of aggregation. If we know how to do it for sugar crops, I remain confident of our ability to do it for cereals, which will bring us closer to our target of a minimum production of 50 Mq per year set out in the food security strategy for our country.
FNH: MAMDA is the reference insurance company for national agriculture. She has supported SIAM since its launch. How do you rate the development of this event?
MO: SIAM has effectively become the essential agricultural event at the regional and continental level, and one of the flagship events at the global level. Its influence is firstly reflected by its impressive numbers: more than 900,000 visitors, more than 1,500 exhibitors and more than 70 nationalities, but also by its scientific program that addresses topical issues of great importance and that brings together the best global experts in the field. The 4th edition of the triple A initiative (Adaptation of African Agriculture) under the leadership of Morocco, held on the sidelines of SIAM 2024, is another illustration of the continental role Morocco plays in finding real solutions for agricultural Africa in the face of the climate. change, and which adds to the Kingdom’s diverse visions for continental development: Atlantic vision, Nigeria-Morocco gas pipeline… For MAMDA, SIAM is a very strong annual meeting that allows us to meet in the same place members who come to visit us from all regions of Morocco . This is an opportunity to listen to them and talk to them regarding their company and the new services available to them. MAMDA has established a relationship of more than 60 years with small, medium and large farmers, and every opportunity is good to celebrate this loyalty in a friendly and family context!
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